Will my Coverage Pay for a Hotel After an Incident?

The protection that a homeowner's insurance policy offers for your house in the case of damage is undeniable. If your home were to get damaged or completely destroyed, you would then need to file a claim on your policy in order to pay for the repairs. At the same time, a great amount of damage can also displace you and your family. A basic house insurance policy accounts for this possibility by paying for your hotel bills while your home is being repaired. Still, there are some limitations to the amount of money the insurance will compensate you for, and the rules vary between policies and companies.

Displacement

Small damages to your dwelling are not always a cause for having to vacate the premises while your home is being repaired. On the other hand, a major damage or total destruction can make your house unlivable. Such significant damage can be attributed to a fire, flood or high winds. Homeowner's insurance companies understand this, which is the reason why hotel coverage is included in basic policies.

A total rebuilding of your home can take up to several months. In such cases, the insurance company might instead require that you rent a comparable home or apartment while the damages are being replaced. Renting a home for many months often costs less than staying in a hotel for the same amount of time, and you would have more access to the amenities that you are accustomed to.

Aside from housing expenses, your homeowner's insurance policy also covers the costs of meals. This can cover food you buy at a grocery store, as well as dining expenses. Keep in mind that your insurance policy will allot for the average amount of money it costs to feed you and your family, and not for extravagant meals that you might want to enjoy by dining out. If you want a fancier meal, then you will have to pay for the additional costs on your own.

Another consideration is whether you rent your home out or not. If the home does become uninhabitable due to major damage, this does not mean that your coverage pays for your tenant's temporary living expenses--this is what a renter's insurance policy is designed to do. At the same time, your policy might help to cover the money that is lost due to a lack of rent from your tenant while the dwelling is being rebuilt. In order to have this kind of coverage, you will need to add this to your policy before renting out your home.

Exceptions

Your homeowner's insurance does cover living expenses, but the amount is not necessarily unlimited. The timeframe that the policy covers your expenses for ultimately depends on the amount of coverage you select in the beginning. This is similar to that of an auto insurance policy's optional coverage for the extended use of a rental car. When you select even the most basic type of insurance policy, you will have to decide how much hotel coverage you will want to pay for. Keep in mind that more coverage equates to higher premiums, while more affordable premiums often mean less coverage.

A basic house insurance plan does cover your hotel expenses after an incident occurs that can make your home uninhabitable. At the same time, the insurance pays for your lodging within reason. This means that you cannot stay at a luxury hotel and expect the company to foot the bill. The insurance is meant to help you live while your home is being rebuilt.

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